Competition body warns Department on medicines

By Paul Mooney

The Competition Authority has given a slap on the wrist to the Department of Agriculture over the latter's plans to more tightly regulate supply of all animal medicines.

The letter from the Authority may be politely worded but it questions the very need for much of the new regulation being planned by the Department. It's Government policy is that new regulation be introduced only on clear need but no such need is evident for preventative farm medicines, it says.

Putting all farm animal medicines on prescription-only would be a ''disproportionate means'' of addressing public health concerns, says the letter, a copy of which has come into The Farmers Journal's possession. These documents make clear that the department, when drawing up its proposals, did not consult with the Authority on matters relating to competition, despite these issues being raised loudly and repeatedly by the representatives of farmers, pharmacists and by suppliers of medicines.

The Authority contacted the Department to outline its concerns. It then formally restated these concerns in the letter. It offers several times to discuss the raised issues with the Department.

Increased costs for farmers

The key points made by the Competition Authority in its letter to the Department were:

Any future legislation should ensure that farmers have freedom of choice of supplier, and benefit from competitive input markets to the greatest extent consistent with public health concerns.

"The corollary of this is that legislation which would effectively increase the exclusive profit-earning potential of vets (ie to the exclusion of other would-be sellers) should be very carefully assessed indeed, in advance, to ensure that no other effective choices are available.''

The Authority is concerned that the proposed controls, as currently drafted, would lead to reduced choice and increased costs for farmers, particularly in regard to preventative medicines, without any benefits for public health.

The Authority would advocate other, less restrictive means of assuring public health. For example, competition could be promoted by use of prescriptions with longer operational life; by allowing qualified persons other than vets prescribe or by ensuring that medicines currently exempt continue to be available to farmers over the counter.

The Authority also considers that the UK designation of Suitably Qualified Persons (ie other than vets) provides a useful model for an open and competitive prescribing regime, within the confines of the EU legislation.

The UK's Competition Commission found evidence that vets were reluctant to issue farmers with prescriptions to take elsewhere for dispensing. "The Authority urges the Department to devise the new legislation in such a way as to avoid the creation of such clear barriers to competition.''

Requiring the identification of particular brands on a prescription, where equally effective substitutes exist, potentially allows for 'foreclosure' of the animal medicines market, particularly to new medicines which may not have a widely-recognised brand name. A mechanism should be included allowing for a range of products to be dispensed under a prescription, where such a range exists.

Don't create monopoly

Perhaps not content with just issuing its own detailed advice to the Department, the Authority's letter then refers to one of the recent debates in the DÄil on the new Veterinary Practice Bill, 2004. The issue was well captured, it says, by Fine Gael deputy Denis Naughten, who said:

"We must take a sensible and straightforward approach to this issue. Anything that does not have a withdrawal period should not be prescription only. It is also important that we do not create a structure that results in a monopoly for veterinarians in this area. The EU directive makes clear that qualified person, not only veterinarians, are entitled to write prescriptions. I accept that with some medicines veterinarians are the most appropriate people to write a prescription. However, this should be limited to a restricted number of medicines and should not apply across the board.''

Department too keen to regulate?

The Authority, the letter says, "would like to draw the Department's attention to the Government's stated policy on regulation''. This is laid down in the Government White Paper 'Regulating Better'. Thus, regulation should be used appropriately so that it does not undermine either its own underlying aims or that of other public policy goals, "including competition policy''.

This is how Government's stated policy should apply to the Department's proposals on farm medicines:

Necessity: the concern which has given rise to the new proposals must be clearly identified and its dangers explained. Given that the proposals involve a radical change in regulation one would expect that a serious public health problem had necessitated such a radical change of policy.

The Department should examine what alternative but effective approaches are open under the EU Directive and whether these would lead to less restrictions on competition. "In particular, the Department needs to assure itself that any new regulations in this area will not have any unintended consequences.''

Effectiveness: Once found to be needed, regulation should then be tested to make sure it actually addresses the problem. "Proposals should be targeted, and capable of being adequately enforced and complied with.''

Proportionality: It is imperative that any necessary restrictions on competition be proportionate and the absolute minimum necessary.

Transparency: It would be useful if the Department produced a clear explanation of the background to and rationale for the particular solution proposed.

Accountability: the regulatory regime must not alienate power and authority beyond that reasonably necessary to carry out their functions to bodies which are not accountable, in this case vets.

Consistency: The proposals raise questions about the consistency of regulation in two respects.

First is consistency between the Department's stance at European Commission level and its implementation of the Directive in Ireland. Second is consistency in terms of ensuring as far as possible the prescription of cheaper, generic drugs rather than more expensive, branded types.

"Based on these principles and the lack of an evident need for a higher level of control on preventative animal remedies, the Authority considers that a requirement for all food producing animal medicines to be prescribed by veterinarians would represent a disproportionate means of addressing public health concerns.''

Authority has a statutory role

Farmers are all too familiar with the Competition Authority's enforcement role. It also, however, has a statutory role in advising other Government agencies and regulators, including the Department of Agriculture, on regulation, etc. The Department therefore, must consider its recommendations on animal medicines.

The Farmers Journal understands that the Authority has found the Department to be co-operative on various other issues the Authority raised in the past and is hopeful the same will happen this time.

This week the Department told The Farmers Journal: "In drafting the legislation, we will take account of the views of the Competition Authority along with the views of the other organisations such as the FSAI and the Irish Medicines Board.''